Management alignment and coherence and CSR contraction and expansion

CSR’s need for strategic alignment

If you’re a corporate social responsibility practitioner and you feel your strategy is a tangled, disparate mess, fear not: you are not the only one. This Harvard Business Review analysis might be dressed up in consultancy-speak – think, “theatres of CSR”, “unified practice platforms” and “interdisciplinary strategy” – but it is straight-talking stuff. Out of the blocks, the authors sum up the reality of most CSR programmes, which are often “initiated and run in an uncoordinated way”, and offer their frank assessment: CSR strategies that drive bottom-line performance are “all to the good”, but such outcomes should be “a spill-over, not their reason for being”.

So should CSR practitioners kick back and settle for the less-than-perfect? No, definitely not. Done well, CSR can deliver important, material outcomes for society and business. Getting there, however, takes two principles of management: alignment and coherence. The first relates to the connection between what the company does – its core operations, market focus and guiding purpose – and its CSR programmes. For a company that has existing CSR activities, kick off with an inventory and audit, work out what fits and what doesn’t, and “prune” where necessary. If you are a fast-food operator, for instance, it’s a lot smarter to collect excess food from suppliers and deliver it to local food banks than to invest in an employee blood-donation programme, as valuable as the latter may be.

Coherence comes into play when looking at a company’s CSR activities in the round. How do the activities play into each other? And, more importantly, how do they link to their end objective? Broadly speaking, CSR activities tend to have one of three aims: to promote philanthropy; to improve operational effectiveness, such as reducing resource use to generate capital savings or investing in employee working conditions and healthcare to increase productivity; or to transform the company’s business model. Having clarified their end goals, businesses then should measure and report on their progress. Although most CSR activities typically cohere with one specific objective, the boundaries between activities are not watertight. For example, a philanthropic programme that generates reputational capital could also translate into increased sales.

And one final tip: if you are alone in your struggle, then don’t be surprised you are struggling. A well-aligned, coherent strategy requires communication and cooperation across the business. Before anything else, reach out across the company, including into the C-Suite, and create a team that is genuinely multi-functional.

Harvard Business Review January 2015 issue
 

Rangan K, Chase L, and Karim S (Jan/Feb 2015) “The Truth About CSR”, Harvard Business Review, Vol. 93 (1/2): 40-49.

Refining the explicit/implicit CSR dichotomy

CSR practices vary around the world. In crass terms, free market economies such as the US and Europe are seen as pioneers while those with strong corporatist traditions such as China, where the government takes a stronger hand, are perceived as laggards.

In 2008, leading UK management scholars Dirk Matten and Jeremy Moon gave theoretical credence to what otherwise might sound like western neo-liberal prejudice. In a landmark paper, the pair distinguished between “explicit” and “implicit” CSR. “Implicit CSR” describes an institutional context in which healthcare, employee training and similar activities are controlled or managed by social partners or the state. This reduces the obligations on companies to provide the same benefits voluntarily. Alternatively, such contexts may see companies fulfil certain social obligations because of deeply embedded norms, values and rules. “Explicit CSR”, in contrast, implies that business enjoys greater regulatory and cultural freedoms. In this case, companies “take on” social and environmental responsibility in a more conscious, explicit fashion and label it as such.

Bjørn-Tore Blindheim’s fascinating paper builds on recent research among Norway’s corporate community to refine Matten and Moon’s theory. It identifies two essential weaknesses in their dualistic argument: the variations within CSR despite the same institutional context and the role that individual managers play in setting the course of companies’ CSR practices. The results are implicit and explicit forms of “contractive” CSR and “expansionist” CSR. “Contractive CSR” describes a discourse in which companies are primarily seen as economic actors (rather than social or political actors) and functionalist in their thinking. In the implicit category, this sees them bound by profitability and legal compliance. In the explicit category, CSR activities are mostly bound by “the nature of the core economic activity of the individual firm or industry”.

The main idea behind the “expansionist” descriptive, on the other hand, recognises a company’s social and political function. In the explicit sense, businesses take on individual responsibility to address specific social needs. The implicit position is similar, yet the same issues are felt to be a collective responsibility and should be addressed through corresponding national and global governance mechanisms.

Blindheim, Bjørn-Tore (Jan 2015) “Institutional Models of Corporate Social Responsibility”, Journal of Business & Society, Vol. 54(1): 52–88.

On campus

The Asia-Pacific Institute of Management will host its third International Conference on CSR and Sustainable Development on 4-5 May 2015 in Dubai, United Arab Emirates. http://www.serd.org.in/csr2015/

The American University’s Kogod School of Business and the Institute for Economics and Peace will focus their 2015 biennial conference on “The Business and Economics of Peace”. The two-day event will convene students, academics and practitioners on 10-11 April 2015 at the American University in Washington DC.



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